An Ugly Budget. What Now?
A few quick notes as the budget just passed and undoubtedly will have been signed by Governor Schwarzenegger by the time you read this.
There will be a backlash against the taxes … but not as much as would had occurred if the 12-cent a gallon gas tax was left in the package. This tax would hit people hard. It is good that it is gone.
However, raising the income tax just plays into the problem the state has suffered all along – a tax system heavily reliant on high-end income taxpayers. The tax system is subject to great volatility and raising the income tax only exacerbates the problem.
There were many gains in this package for Republicans, but it will take time for the message to get out to the rank and file. Among the pluses is a spending limit and rainy day fund that should keep year to year spending increases in check. Also, the idea that local school districts will have greater control over money sent from the state was an important victory. A tax credit for small businesses creating jobs is another plus in the package. The question is, who will deliver the message if the party apparatus is focused on the tax increases?
Needed: A Geekier Campaign
This is still the newborn stage of Meg Whitman’s political career. And career transitions are always tough. But I’m disappointed with how she launched her gubernatorial bid.
I don’t have any particularly problem with what she said in interviews with the LA Times and NBC’s Today show. Most of it was boiler plate. I even thought it was a tiny bit brave, for a Republican running in a closed Republican primary, to offer a complex position on gay marriage (she’s against it but for protecting the marriages of those who married lawfully last year – which Republicans should understand as respect for the rule of law – and for adoption by gay couples, a moral imperative in a world with too many parentless or unwanted children).
They’re Baaaaaaaaaack!
GM wants $30 Billion from Congress now – $12 Billion more than their previous request. Their stock closed at $2.15. If they don’t get it, they have threatened catastrophic (a word which, when used in the economic context, has now officially officially been beaten to death) bankruptcy to follow. The very thing which, during their last hat-in-hand visit to Washington, GM’s execs told Congress would be unthinkable, signaling the end of any consumer ever considering buying another GM car again. Crying wolf.
To “sweeten the deal,” GM has also said that it will fire 47,000 people it presently employs by the end of the year – this, out of 244,000 employees around the world– roughly one-fifth of GM’s worldwide workforce, of which some 20,000 jobs will be lost right here in the U.S., and five more plant closings, leaving more monster factories taking up miles of space to rot. And, if GM doesn’t get the $30 Billion it now wants, they predict that by the end of March, some 6 weeks from now, that’s all for GM. . . Last one out turn off the lights.